A growing number of American workers are losing track of their retirement savings, potentially missing out on a big chunk of their financial nest egg.
Trillions in retirement assets abandoned
A new analysis from Capitalize, a service that helps people transfer retirement accounts, found that there are 31.9 million lost 401(k) accounts as of July 2025. Collectively, these accounts hold an estimated $2.1 trillion in assets. That’s up about 30% from its last report in the middle of 2023.
Private sector employees — who are frequently offered 401(k) plans by their employers — aren’t the only ones affected. According to Capitalize, federal workers are projected to leave behind nearly three million Thrift Savings Plan accounts by the end of 2025, driven by federal government layoffs.
What’s causing 401(k)s to get left behind
While frequent job changes and layoffs are part of the reason why so many 401(k)s get left behind, there are other factors. More workers are participating in retirement plans, thanks in part to laws like the Secure 2.0 Act that expanded automatic enrollment.
Additionally, rolling a 401(k) into another retirement plan is a manual, and often complicated, process. To initiate a rollover, you need to contact your plan administrator, who will then make a payment to your new retirement plan or IRA, or mail you a check to deposit. If you’re being mailed a check, you have 60 days to deposit it, or that money may be considered taxable. The IRS can waive this requirement in extenuating circumstances, but that is another, separate process.
It’s easy to see why some people may delay deciding what to do about their accounts, or even forget about them altogether. And if they were automatically enrolled, they might not know that they need to initiate a rollover. Looking ahead, 401(k) rollovers could get even more complicated: Recent policy changes encourage alternative assets, such as private equity, into 401(k)s, but they’re less liquid compared with the mutual funds that are the bedrock of most plans.
The high costs of forgetting a 401(k)
You can leave your 401(k) where it is, but doing so could potentially risk higher fees and lower returns over time.
Capitalize estimates that the average forgotten 401(k) holds about $66,691, up 18% from $56,616 in May 2023. This growth is attributed to the stock market, but in an account where investments are managed, rebalanced and monitored, the potential returns could be even higher.
In a worst-case scenario with high fees and poor asset allocation, Capitalize says this forgotten 401(k) account could end up costing someone over $500,000 in lost savings.
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Forgotten 401(k) in a money market fund |
Well-allocated, low-fee IRA or 401(k) |
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What to do with your 401(k) if you leave a job
Want to avoid leaving money on the table? Know your options for your 401(k) plan, which can help you decide what to do.
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Rollover to your new 401(k) plan. If you’re starting a new job with a workplace retirement account, you can consider rolling over your existing 401(k) into the new one. Talk to both the plan administrator for your old and new plans to learn their processes, and keep track of timelines — particularly if you’re being sent a paper check that needs to be deposited.
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Cash out your 401(k). If you are at retirement age, you may consider cashing out some of your 401(k). If you decide to go this route, also consider what taxes may be involved and if it could affect your tax bracket and Medicare premiums. If you are not at retirement age, an early 401(k) withdrawal could result in taxes and penalties.
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Leave it where it is. In some instances, this may be the right choice. Compare the plan’s fees and investments with what you might pay and access elsewhere, like in an IRA. Also consider making a plan to review the account regularly to stay on top of investment performance and potential fee changes.
